The Australian share market finished the day weaker after sagging bank stocks outweighed gains to the energy sector.

The benchmark S&P/ASX200 index closed down 26.5 points, or 0.56 per cent, at 4,736.6 points, while the broader All Ordinaries index fell 23.8 points, or 0.49 per cent, at 4,829.2 points.

On the ASX 24, the December share price index futures contract was down 27 points at 4,732 points, with about 20,000 contracts traded.

Among the banks, Westpac led the falls, down 53 cents, or 2.3 per cent, at $22.66, while National Australia Bank declined 22 cents at $23.93, ANZ was off 31 cents at $23.28 and Macquarie Group fell 29 cents, at $37.19.

Commonwealth Bank bucked the trend to rise three cents, at $50.73.

Miners were mixed, with market heavyweight BHP Billiton off 21 cents, at $44.82 and rival Rio Tinto down 20 cents, at $84.45.

But Stirling Minerals was up nearly 12 per cent, or 2.5 cents at 24 cents after its shareholders backed the junior explorer's takeover of iron ore hopeful DMC Mining Ltd.

Uranium miner Paladin Energy struck a deal to acquire uranium explorer Aurora Energy Resources Inc for $C260.87 million and its shares closed up 12 cents, at $5.03.

Gold specialist Newcrest was down nearly one per cent, at $40.39, despite a rise to the price of the precious metal.

The spot gold was trading at $1,383.20 per fine ounce, up $7.80 from Friday's closing price of $1,375.40.

Shares in the energy producer closed up 4.1 per cent, at $13.50.

Among other energy stocks, Woodside Petroleum fell 29 cents, at $42.88 but Oil Search firmed three cents, at $7.03 and Origin Energy closed two cents higher, at $17.02.

Consultant engineer Coffey International Ltd forecast a halving in first half operating earnings, sending its shares down 8.4 per cent, at $1.04.

Shares in Qantas fell nearly two per cent at $2.57 after icy conditions in London caused passengers scheduled to travel on some flights to face long delays.

With Christmas trading underway, retailers were mixed and Coles owner Wesfarmers was up 15 cents, at $31.67, but Woolworths fell 18 cents, at $26.66.

Myer Holding firmed one cent, at $3.54, but David Jones reversed six cents, at $4.46 and Harvey Norman was steady at $3.01.

Air purification goods supplier AFT Corporation Ltd was the strongest rising stock, up 100 per cent at 0.2 cents, after it more than tripled its expected full year profit.

Australia China Holdings Ltd fell the most, down 33 per cent, at 0.2 cents.

Preliminary national turnover was 2.12 billion shares worth $4.35 billion, with 495 stocks up, 630 down and 374 unchanged.

The Australian dollar dipped in Asian trade Monday on heightened concerns about Korea, while bonds moved higher on both ends of the curve.

In a light volume session ahead of the Christmas holiday, the Australian dollar was hit by renewed concerns of tensions on the Korean Peninsula after the South Korean Defense Ministry said it would hold a live fire artillery exercise on Yeonpyeong island today.

Given the light volume, traders noted the market moves are likely to be exaggerated in the coming sessions as the year winds down, with little conviction to buy riskier assets.

For those riskier assets that have rallied sharply this year, including the Australian dollar, the propensity to sell is even greater.

The Australian dollar traded at $0.9869, down from $0.9906 late Friday.

The currency had been around $0.9900 prior to the escalation of Korean concerns.

Against the Japanese yen, the Australian dollar traded at 82.78, from 83.11.

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